Question about Utilization

[IonZephyr]

Hello .  I have a quick question based off credit utilization.

I currently have a few credit cards, with a total credit line of $91,000.

I only maintain a balance on just one of my cards ($900 current balance, meaning total utilization is roughly 0.98%)

My question is... is it best to keep a minimal balance, as I currently am... or better to have a zero balance across all cards?

[Slabenstein]

If by keeping a balance you mean reporting one, then yes, it is best to report a small balance on one of your bankcards.  If all of your revolvers report a $0 balance you'll incur the all-zero scoring penalty.

If, on the other hand, by keeping a balance you mean carrying one, that in itself has no effect on score and will cost you interest you might not need to be paying.

[Anonymous]

When you say $900 current balance, do you mean a $900 current balance if you log into that account right now, or do you mean a $900 current [reported] balance if you look at that account on your CR?  It's very important to make this distinction.

For maximum credit scoring purposes, you want one of your revolving accounts to have a non-zero reported balance.  If your $900 is reported, you've satisfied revolving credit use being shown.  Your goal should be to use/pay off all of your cards in full monthly while allowing at least 1 (only one for optimization) to report a non-zero balance.

[IonZephyr]

Thank you very much for the replies!

I intend to use one my cards (lets say my CapOne card) for all my bills ($300 monthly).  I want to PIF each month while letting the $300 report on only this single card...

My Due date is the 5th of the month

while my Closing date (which I believe is also the Reporting date) is usually on the 8th...

When is the proper time to pay the $300 in full?  Days after the closing/report date?? This is a something I am confused on...

Sorry. extremely noob question, just trying to get a grasp how this is done. 

[Slabenstein]

Cap1 reports your balance at statement close so you'd want to pay sometime between your statement date and the due date.  For your card that would be sometime between somewhere around the 8th (Cap1 statement close varies month to month) and the 5th of the next month.  I usually PIF shortly after my statement generates, just to keep things simple.

[Anonymous]

Yeah for your capital one you want to pay anytime after the reporting date. For instance if we pay the statement as soon as it’s generated, then all month you make charges, you’ve already made your payment so you don’t have to worry about the due date, so a due date passes and so does the closing and reporting and reports that $300 balance.

Then you go ahead and pay that statement balance rather than waiting for the due date. If you instead wait till the due date, the charges you rack up during the month, you’ll be paying off and won’t be reported.

So to keep it simple pay it as soon as the statement generates, but you can’t miss a due date setting it up in that cycle.

Hope that makes sense.

[IonZephyr]

That make sense. So shortly after the statement close date (which is the reporting date).     

Thank you.

Yes I do want the $300 balance to show each month, but I want to PIF after it reports to avoid interest

[Anonymous]

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@IonZephyr wrote:

That make sense. So shortly after the statement close date (which is the reporting date).     

Thank you.

Yes I do want the $300 balance to show each month, but I want to PIF after it reports to avoid interest

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@IonZephyr you can pay it right after the statement generates. And the sooner you do so after it generates, the more of the month you have make charges to bring up the statement balance that will report, and then the statement will be generated and you'll pay again. 

if you're trying to have a certain amount reported, then right before the closing date you pay it down to where you want it to report. Then it reports and then you pay the statement balance and keep it moving.

But that allows you to bring the number down if you charge more than you want to report through the month. in that case, you make a payment before closing date and then again right after closing.

[SouthJamaica]

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@IonZephyr wrote:

Thank you very much for the replies!

I intend to use one my cards (lets say my CapOne card) for all my bills ($300 monthly).  I want to PIF each month while letting the $300 report on only this single card...

My Due date is the 5th of the month

while my Closing date (which I believe is also the Reporting date) is usually on the 8th...

When is the proper time to pay the $300 in full?  Days after the closing/report date?? This is a something I am confused on...

Sorry. extremely noob question, just trying to get a grasp how this is done. 

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If you use only one of your cards, the lenders might close your other cards.

If you want to keep a card, be sure to use it at least once every 3 months or so.